Better Together: Market Research + Business
For any marketing plan to succeed, it must be backed up by solid market research. No marketing plan or strategy has been without some form of marketing research. Market research helps unearth underlying issues in an existing plan and provides information on where to steer any business—in the direction in conjunction with the results of the market research.
Data from market research are to the marketing plan what street signs are to the road map. The two are simply no good without the other. It’s just like Uber nowadays—you have a path to a specific direction, details about the vehicle we are in, who is in the driver’s seat, and how long the trip will take. Perfect!
What Is Market Research?
Ever tried stalking one of your exes? Sounds illegal, right? Or is it only when you get caught? Similarly, market research is the same in that it is a serious fixation on finding out more about a target market—your audience, clients, customers.
On a serious note, market research is a mix of gathering and analyzing information about a market, product, or service that you are planning to sell. It is a wholehearted approach to research and information gathering, delving deeper into customer profiles such as spending habits, inclinations affecting their decision making, down to the competitors you have in the business.
A Short History of Market Research as We Know It
Market research owes its roots to the man named Daniel Starch from the late 1920s. He developed a theory about advertising having to be seen, read, believed, remembered, and acted upon. Soon after, he started a research company that interviewed people in the streets, asking whether they read publications and about any ads they remembered. Thus, it gave birth to the first method or type of market research, which was surveying. This was the start of the quantitative marketing questionnaire era.
By the late 1930s, researchers developed new techniques such as the focus group, and Ernest Dichter’s psychedelic motivational research. However, qualitative research such as these were at the time hard to prove as it dealt on the emotional aspect of the consumers. This made big companies revert to the standard survey questionnaire (or the quantitative style), which made more sense to them, or was at the time the logical choice.
The 1970s spelled a comeback for qualitative research, as marketing academic John Howard incorporated views from other social sciences into the research. Consumer groups then shifted back to the focus group style of marketing centering on consumer behavior and buying patterns.
In today’s digital era, heaps of marketing tools and methodologies exist and can be made use of, especially with the assistance of technology. The Internet has so far been the biggest catalyst to propelling advertising and marketing to newer heights. Analysis has now become more comprehensive, delving deeper into the market, the players, and the consumers.
Market Research in Business
As we can see from the brief history above, market research has been vital to business in helping reach out to more potential consumers and getting a bigger slice of the business in the market.
Market research updates the business with the latest trends happening in the market or industry sector. It provides information regarding the demand for a specific product, item, or service, as well as how consumers or customers behave, and the sales and growth opportunities for a certain product or service in the market.
The market is better understood from analyzing the information gathered through market research. This leads businesses to push for better product designs and features to be able to stay competitive in the market. This also helps businesses to forecast product or service demands.
Information relating to competitors help businesses understand their rivals and also present opportunities to highlight niche selling points that a business could use over competition.
Higher returns on investment are obtained due to higher sales from the effect of good marketing research and the proper execution of a marketing plan.
Major Types of Market Research
Market research aims to find answers to questions regarding a targeted market. Deciding what method or type of research to use is dependent largely on what is suited best for the goal or objective. Marketing research is divided generally into two types, primary and secondary research.
As can be deduced from the name, data is collected from the primary sources: in the field or directly from the customer. It is new research and is carried out through questionnaires, surveys, and interviews. Primary research can either be quantitative or qualitative in nature.
- Quantitative research means gathering empirical data or information from observation that can be translated or measured by figures or numbers.
- Qualitative research represents gathering of information or data to understand reasons, opinions, and motivations relating to a topic.
Information that is publicly available and previously researched (prepared through primary research) is used as a source for secondary research. Secondary research is commonly an evaluation of original or primary published research.
What Is the Difference between Primary and Secondary Research?
The main difference between primary and secondary research is that the former is the gathering of fresh data while the latter makes use of data already collected through primary research. Simply put, the difference lies from where the data is collected. Which leads us to another question:
What Are Primary and Secondary Sources?
A primary source gathers firsthand or direct information about a person, object, or topic. Examples of primary sources would be historical and legal documents, experiment results (from experiments done by you), eye witness accounts (direct interviews), speeches, art objects, video recordings, surveys, fieldwork, blogs, newsgroups, etc. Point is, it is the result of a direct observation of an experiment, phenomena, or event.
A secondary source is simply either a description, discussion, formal analysis, commentary, evaluation, or processing of a primary source. Such sources include newspapers, magazines, commentary articles, or any evaluation of original or primary research.
Primary, secondary. Now that wasn’t so hard, was it?
Factors to Consider in Conducting a Market Research
Developing an understanding of your target market or audience is gained through market research. Having a specific plan in tackling any marketing campaign contributes to the success of that campaign. Marketing plans are built on tedious hours poring over data and analyzing information gathered from marketing research.
Consider the following research factors to help set those goals and specific plans.
1. Market Profitability
All for-profit businesses are in it for the money. But is the market interested? Do they have use for the product or service you plan to sell? Granting they have a use for your product but are not interested in buying it, what would be the point?
The same is equally true if we turn the page around. A product with a high marketing potential is of no use if it has no big impact in the chosen industry or market. Finding out whether people in the chosen market are willing to spend money is a good indicator of a healthy profitable market worth spending research time on.
2. Market Complexity
In gathering information about individuals in a target market, ask yourself if the target market can be manageable enough for you.
Sure. You want to sell your products to any and every person showing the slightest inkling of interest with your product. But taking on every person at once? You’d have to be a super computer fitted with a giga-core processor on sub-zero cooling to avoid overheating your precious components with the gazillion bits of data you would have to process.
The point of the matter is, finding the right-sized range of people helps you produce an effective research in contrast to trying to research everyone at once. (Like trying to catch a school of fish with a harpoon gun. You’ll have to have them lined up to get a straight shot through for everyone.)
To dominate a market, you have to gain a deep and thorough understanding of the customer base. You would have to develop different techniques on how to approach a certain type of group in a segment. Otherwise, inconsistent research results will make it hard to focus on any marketing directive or campaign, and the results would be divided enough that you might have not done any market research to begin with.
Finding a niche for your main market is the key goal in your research agenda. Subdividing a market into segments to fit consumer behavior can also work. However you may put it, the main thing is to having a manageable market for you to operate.
3. Research Method
As mentioned above, there are two general types of conducting your research. Getting direct and indirect sources of information in gathering data for your research is important. Finding the right mix of both also helps in accounting for the costs involved in conjunction to your budget estimates. Devising a healthy combination of secondary research together with surveys, questionnaires, focus groups, and interviews is vital in achieving a successful market research.
4. Competitor Analysis
As man will ultimately (probably) discover that we are not alone in this universe, so are businesses in their respective markets. Accounting for competitors, and the behavior of customers in relation to any competitive marketing efforts, also provide insight into how you can formulate your marketing plan accordingly.
Business analysis of competitors also helps in developing key changes in improving your product or service and in coming up with a niche market. Knowing all the big players in the game helps you level up or get above and beyond the levels of competition. Are you up for the challenge?
5. Research Objective
Having a target market or customer base locked down in your radar, the next logical step would be to consider why you are doing the research. Define the ultimate goal of your market research, whether it is to increase brand awareness or improve overall sales. Having a clear-cut idea on what you want helps you formulate survey questions and interviews to get the right answers out of your interview or survey group.
6. Research Frequency and Schedule
For research projects involving longer time spans, it is important to set up a schedule for interviews, surveys, and the like. It is important to include and identify what the topic is, who are the participants, the timing, methodology, and purpose.
7. Help in Research
Conducting market research can be both expensive and time consuming. Considering getting help in doing the research hastens the process but at an added cost or expense of an existing resource. As the popular saying goes, two heads are always better than one. You can never do all things at once and keep at a demanding schedule. Market research is always done in terms of product or brand along with staff allocations for each.
5 Basic Methods of Market Research
Considering the methods aforementioned, there are five commonly used methods of market research.
Method 1: Surveys
Surveys account for most of the market research done presently. And why would they not? They’re simple and can be filled out at your own leisure. These questionnaires are given out to sample groups that are aimed to represent the targeted market. Surveys come in many different forms:
- In-person surveys. Commonly seen as one-on-one interviews made in high-volume traffic areas like the malls, or bus and train stations. These surveys are usually done by presenting samples of products or any promotional print material—like advertising flyers, or advertising brochures—to elicit immediate response. These surveys give out very high response rates but come at a cost, considering the time and labor involved in the survey process.
- Snail mail surveys. These present an inexpensive method in conducting surveys and reaching a broader audience. As compared to other survey methods, mail surveys are relatively cheaper. The downside is that the response rate for mail surveys sent through email lists are also very low. This, however, does not stop many small businesses from conducting this old but still effective survey method.
- Telephone surveys. Probably costs lesser than in-person surveys but costs more than mail surveys. Telephone surveys are considered by customers to be quite irritating, and it is fairly difficult to convince customers to participate in such surveys. Response rate, though, is much better compared to mail surveys. It is not as easy to ignore a ringing phone.
- Online surveys. This is the easiest and the cheapest way to do surveys. However, online surveys tend to present unpredictable response rates and unreliable data.
Method 2: Focus Groups
Focus groups are group discussions held at various venues where the event is being recorded. A moderator leads the discussion with a ready-made set of questions and topics designed to get responses from the participants. These are usually done in three sets of groups in order to get balanced responses.
Method 3: Personal Interviews
Personal interviews are conducted using open-ended questions that elicit a range of answers, like the focus group aims to do. Interviews and focus groups are known to be a subjective type of data collection in contrast to what surveys offer. The focus on conducting personal interviews and focus groups delve more into the insights taken from customer attitude toward the market, which potentially uncovers issues related to the development of new products and services.
Method 4: Observation
There is no other more definite form of evidence of people’s natural behavior than capturing some event taking place on video. Some businesses use this method to see the consumers themselves right in the midst of the action. At stores, at work, at home—anywhere where they are buying or using a product. Hey, Big Brother, is that you?
Method 5: Field Trials
This method of market research introduces new products at select stores to assess customer response in real-time conditions. This set-up helps companies make adjustments in terms of changes to the product itself, the pricing, or the packaging. Big consumer brands usually follow this strategy and are therefore more successful in being spotted at first glance upon entering the store.
Benefits of Market Research
While it may take an entirely new article to enumerate all the benefits that proper market research provides to a business, in a nutshell, the following are the primary benefits of having a solid marketing research for your business:
- Market research serves as a guide in communicating with current and potential customers; identifying their needs and demands.
- Opportunities in the market are spotted through market research.
- Market research minimizes the risks involved in acquiring a new business or investment.
- It provides analysis on different emerging market and top marketing trends.
- Market research allows the business to identify competitor strengths and weaknesses.
- Market research allows you to quantify market size and the rate of growth of a market.
- It identifies any challenges or issues for market growth by uncovering potential issues and problems.
- Market analysis helps you plan ahead through the provision of revenue projections.
- It helps evaluate business success through benchmarks.
- Market research advances brand recognition.
- Market research provides a gauge for business reputation.
- Market position is strengthened through the effects of solid marketing research.
Conducting solid marketing research on a target market not only helps the business but also helps the consumers. With everything that is going on, it is important for businesses to understand that in accommodating for the needs of consumers, they are not only making a better name for themselves or positioning themselves in the forefront of the competition but also in fact help make the lives of consumers better by the quality and care they preserve in keeping the product up to the customer’s expectations. The consumers, after all, are the driving force behind the branding success of every business.